Cost Per Action (CPA)


Cost Per Action (CPA)

Cost per action, or CPA – sometimes referred to as cost per acquisition – is a metric that measures how much your business pays in order to attain a conversion. Generally, your CPA will be higher than your cost per click, or CPC, because not everyone who clicks your ad will go on to complete your desired action, whether it’s making a purchase or filling out a form to become a lead. Cost per action takes into account the number of ad clicks you need before someone converts – in order words, improving your conversion rate will lower your CPA. Along with CPC, your CPA will contribute to your overall Google ad costs.

So, what determines your CPA? Like most things PPC, your CPA is directly affected by your Quality Score, Google’s all-important metric based on the quality of your keywords, ads, and landing pages. In general, the higher your Quality Score, the lower your costs – in fact, for each point your score is above the average Quality Score of 5, your CPA will drop about 16%.

Keeping your Quality Score high and your CPA low can be a huge benefit to your PPC budget over time, giving you the opportunity to buy more exposure in the online advertising space and optimize the number of conversions that come from your ad spend.

How Quality Score Affects Cost Per Action

It’s well known that Quality Score in Google Ads (formerly known as AdWords) affects your cost per click, but not everyone realizes that Quality Score is every bit as important in determining your cost per conversion.

Most common CPA actions

The actions that advertisers request most frequently in Cost Per Action are

• Request the email of the users to send periodic newsletters as a direct marketing strategy in the network.
• Request that users accept a subscription on the advertiser's website.
• Request that users buy a product or book a service.

Uses of the CPA in online advertising

Within online advertising, not all types of ads use Cost per Action as a payment method, moreover, the most common are CPM (Cost per thousand impressions) or CPC (Cost per click).

Generally, the most common uses of CPA are in affiliate marketing and display campaigns. This is the most coveted payment model by advertisers as it ensures a return on their ROI.

However, keep in mind that the CPA is not always the most appropriate payment method. You have to assess, on the one hand, the type of company and, on the other, the objective of the campaign.

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